The beef business in an era of uncertainty
With a late harvest, among a litany of other things, uncertainty continues to grip agriculture.
Burt Rutherford, BEEF Magazine
Oct 02, 2019
“Global trade tensions are ratcheting up as world economic growth slows. However, the new trade deal struck between the U.S. and Japan is a bright spot and will bolster U.S. agriculture’s competitiveness into a key export destination.”
So says Dan Kowalski, vice president of the Knowledge Exchange division at CoBank, in the bank’s October Quarterly Rural Economic Review. But he says there is still plenty of uncertainty as we head into the last quarter of the year.
According to Cobank’s report, the historically late-planted corn crop cast a long shadow through the third quarter with extremely volatile cash corn prices. “End users like ethanol producers and livestock feeders bid old-crop corn supplies higher in anticipation of a short harvest this fall, with prices falling back to levels seen prior to spring planting.
“Farmers continue to hold on to old-crop corn supplies in hopes that prices will recover in the months ahead on local supply shortages. But globally, grain stocks remain ample and are widely expected to dull any significant rallies in corn if harvest reports confirm a smaller-than-expected U.S. crop,” the report continues.
I had the pleasure last month of giving presentations during Husker Harvest Days in Grand Island, Neb., on this very topic—how uncertainty in ag markets will play out. As an aside, it was my first time to attend the show. If you’ve not attended, I suggest you put it on your calendar for next year. It’s a remarkable event.
My answer to how uncertainty in ag markets will play out is…I don’t know. I do know that markets don’t deal well with uncertainty and eventually will sort it out. But it will take some political resolutions, such as with China, for that to fully happen. And the U.S. and China will find resolution, because both sides have no other choice...